Exhibit
4.1


 


HELICOS BIOSCIENCES CORPORATION


 


WARRANT TO PURCHASE COMMON STOCK


 




	
  Warrant
  No. [        ]

  	
   

  	
  Original Issue Date:
  December [        ], 2009

  






 


Helicos BioSciences Corporation, a Delaware
corporation (the “Company”), hereby certifies
that, for value received, [                ]
or its permitted registered assigns (the “Holder”),
is entitled to purchase from the Company up to a total of [                ]
shares of common stock, $0.001 par value per share (the “Common
Stock”), of the Company (each such share, a “Warrant Share”
and all such shares, the “Warrant
Shares”) at an exercise price equal to $1.4385 per share (as
adjusted from time to time as provided in Section 9 herein, the “Exercise Price”),
at any time and from time to time on or after the six month anniversary of the
date hereof (the “Trigger
Date”) and through and including 5:30 P.M., New York City
time, on June [      ], 2015 (the “Expiration  Date”),
and subject to the following terms and conditions:


 


This Warrant (this “Warrant”) is one of a series of similar
warrants issued pursuant to that certain Underwriting Agreement, dated December 15,
2009, by and between the Company and Thomas Weisel Partners LLC (the “Underwriting Agreement”).  All
such warrants are referred to herein, collectively, as the “Warrants.”  The original issuance of the Warrants by the
Company pursuant to the Underwriting Agreement has been registered pursuant to
a Registration Statement on Form S-3 (File No. 333 163011) (the “Registration Statement”).


 


1.                                       Definitions. 
In addition to the terms defined elsewhere in this Warrant, capitalized
terms that are not otherwise defined herein have the meanings given to such
terms in the Underwriting Agreement.


 


2.                                       Registration of Warrants. 
The Company shall register this Warrant, upon records to be maintained
by the Company for that purpose (the “Warrant  Register”),
in the name of the record Holder (which shall include the initial Holder or, as
the case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder) from time to time. 
The Company may deem and treat the registered Holder of this Warrant as
the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice to
the contrary.


 


3.                                       Registration of Transfers. 
Subject to compliance with all applicable securities laws, the Company
shall register the transfer of all or any portion of this Warrant in the
Warrant Register, upon surrender of this Warrant, with the Form of
Assignment attached as Schedule 2 hereto duly completed and signed, to
the Company’s transfer agent or to the Company. 
Upon any such registration or transfer, a new warrant to purchase Common
Stock in substantially the form of this Warrant (any such new warrant, a “New  Warrant”)
evidencing the portion of this Warrant so transferred shall be issued to the
transferee, and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder.  Any New Warrant issued pursuant to a partial
exercise of this Warrant or as a result of a transfer of this Warrant shall be
deemed to have the Original Issue Date of December [      ],
2009, which is the date that this Warrant was initially issued to such Holder
or its predecessor.  The acceptance of
the New Warrant by the transferee thereof shall be deemed the acceptance by
such transferee of all of the rights and obligations in respect of the New
Warrant that the Holder has in respect of this Warrant.  The Company shall prepare, issue and deliver
at its own expense any New Warrant under this Section 3.


 

















 


4.                                       Exercise and Duration of Warrants.


 


(a)                                  All or any part of this Warrant shall be
exercisable by the registered Holder in any manner permitted by Section 10
of this Warrant at any time and from time to time on or after the Trigger Date
and through and including 5:30 P.M. New York City time, on the Expiration
Date.  At 5:30 P.M., New York City
time, on the Expiration Date, the portion of this Warrant not exercised prior
thereto shall be and become void and of no value and this Warrant shall be
terminated and no longer outstanding.


 


(b)                                 The Holder may exercise this Warrant by
delivering to the Company an exercise notice, in the form attached as Schedule
1 hereto (the “Exercise  Notice”),
completed and duly signed, and the date on which such item is delivered to the
Company (as determined in accordance with the notice provisions hereof) is an “Exercise  Date.”  The Holder shall pay the Exercise Price for
the number of Warrant Shares as to which this Warrant is being exercised (which
may take the form of a “cashless exercise” if so indicated in the Exercise
Notice and if a “cashless exercise” may occur at such time pursuant to Section 10
below) prior to delivery of the Warrant Shares. 
The Holder shall not be required to deliver the original Warrant in
order to effect an exercise hereunder. 
Execution and delivery of the Exercise Notice shall have the same effect
as cancellation of the original Warrant and issuance of a New Warrant
evidencing the right to purchase the remaining number of Warrant Shares.


 


5.                                  Delivery of Warrant Shares.


 


(a)                                  Upon exercise
of this Warrant, the Company shall promptly (i) (but in no event later
than one (1) business day after the Exercise Date) confirm in writing to
the Holder the Company’s receipt of the Holder’s Exercise Notice, and (ii) (but
in no event later than three (3) Trading Days after the Exercise Date)
issue or cause to be issued and cause to be delivered to or upon the written
order of the Holder and in such name or names as the Holder may designate an
electronic delivery of the Warrant Shares to the Holder’s account at the
Depository Trust Company (“DTC”)
or a similar organization.  The Holder,
or any Person permissibly so designated by the Holder to receive Warrant
Shares, shall be deemed to have become the holder of record of such Warrant
Shares as of the Exercise Date.  As used
herein, the capitalized term “Trading
Day” means (i) a day on which the Common Stock is listed or
quoted and traded on its Principal Trading Market (other than the OTC Bulletin
Board), or (ii) if the Common Stock is not listed on a Trading Market
(other than the OTC Bulletin Board), a day on which the Common Stock is traded
in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if
the Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by Pink Sheets LLC (or any similar organization or agency succeeding to its
functions of reporting prices); provided
that in the event that the Common Stock is not listed or quoted as set forth in
(i), (ii) and (iii) hereof, then Trading Day shall mean a New York
Business Day; the capitalized term “Trading
Market” means whichever of the New York Stock Exchange, the NYSE
Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ
Capital Market or the OTC Bulletin Board on which the Common Stock is listed or
quoted for trading on the date in question; the capitalized term “Principal Trading Market”
means the Trading Market on which the Common Stock is primarily listed on and
quoted for trading, which, as of the Original Issue Date, is the NASDAQ Global
Market; and the capitalized term “Person” means an individual, corporation,
partnership, limited liability company, trust, business trust, association,
joint stock company, joint  venture, sole
proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed here.


 

















 


(b)                                 In addition to any other rights available
to the Holder, if by the close of the third Trading Day after delivery of an
Exercise Notice and the payment of the aggregate exercise price in any manner
permitted by Section 10 of this Warrant, the Company fails to deliver to
the Holder the required number of Warrant Shares in the manner required
pursuant to Section 5(a), and if after such third Trading Day and prior to
the receipt of such Warrant Shares, the Holder or the Holder’s brokerage firm
purchases (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall, within
three (3) Trading Days after the Holder’s request and in the Holder’s sole
discretion, either (1) pay in cash to the Holder an amount equal to the
Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased (the “Buy-In
Price”), at which point the Company’s obligation to deliver such
Warrant Shares shall terminate or (2) promptly honor its obligation to
deliver to the Holder such Warrant Shares and pay cash to the Holder in an amount
equal to the excess (if any) of Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased in
the Buy-In over the product of (A) the number of shares of Common Stock
purchased in the Buy-In, times (B) the closing bid price of a share of
Common Stock on the Exercise Date.


 


(c)                                  To the extent permitted by law, the
Company’s obligations to issue and deliver Warrant Shares in accordance with
and subject to the terms hereof (including the limitations set forth in Section 11
below) are absolute and unconditional, irrespective of any action or inaction
by the Holder to enforce the same, any waiver or consent with respect to any
provision hereof, the recovery of any judgment against any Person or any action
to enforce the same, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the Holder or any other Person
of any obligation to the Company or any violation or alleged violation of law
by the Holder or any other Person, and irrespective of any other circumstance
that might otherwise limit such obligation of the Company to the Holder in
connection with the issuance of Warrant Shares. 
Nothing herein shall limit the Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.


 


6.                                       Charges, Taxes
and Expenses.  Issuance
and delivery of shares of Common Stock upon exercise of this Warrant shall be
made without charge to the Holder for any issue or transfer tax, transfer agent
fee or other incidental tax or expense in respect of the issuance of such
shares, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the registration of any Warrant Shares or the Warrants in a name
other than that of the Holder or an Affiliate thereof.  The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof. As used herein, “Affiliate” means,
with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, Controls, is controlled by or is under
common control with such Person, as
such terms are used in and construed under Rule 405 under the Securities
Act.  With respect to a Holder,
any investment fund or managed account that is managed on a discretionary basis
by the same investment manager as such Holder will be deemed to be an Affiliate
of such Purchaser; and the capitalized term “Control” (including the terms “controls,” “controlling,”
“controlled by” or “under common control with”) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise


 

















 


7.                                       Replacement of Warrant. 
If this Warrant is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and substitution for this Warrant, a New
Warrant, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction (in such case) and, in each case, a
customary and reasonable indemnity or surety bond, if requested by the
Company.  Applicants for a New Warrant
under such circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable third-party costs as
the Company may prescribe.  If a New
Warrant is requested as a result of a mutilation of this Warrant, then the
Holder shall deliver such mutilated Warrant to the Company as a condition
precedent to the Company’s obligation to issue the New Warrant.


 


8.                                       Reservation of Warrant Shares. 
The Company represents, warrants, covenants and agrees that it will at
all times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares that are issuable and deliverable upon
the exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 9).  The Company covenants that all Warrant Shares
so issuable and deliverable shall, upon issuance and the payment of the
applicable Exercise Price in accordance with the terms hereof, be duly and
validly authorized, issued and fully paid and nonassessable.  The Company, without requiring any action to
be taken or expense to be incurred by Holder, will take all such action as may
be reasonably necessary to assure that such shares of Common Stock may be
issued as provided herein without violation of any applicable law or
regulation, or of any requirements of any securities exchange or automated
quotation system upon which the Common Stock may be listed.


 


9.                                       Certain Adjustments. 
The Exercise Price and number of Warrant Shares issuable upon exercise
of this Warrant are subject to adjustment from time to time as set forth in
this Section 9.


 


(a)                                  Stock Dividends and Splits. 
If the Company, at any time while this Warrant is outstanding, (i) pays
a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii) subdivides
its outstanding shares of Common Stock into a larger number of shares, (iii) combines
its outstanding shares of Common Stock into a smaller number of shares or (iv) issues
by reclassification of shares of Common Stock any shares of capital stock of
the Company, then in each such case the Exercise Price shall be multiplied by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately before such event and the denominator of which shall be
the number of shares of Common Stock outstanding immediately after such event.  Any adjustment made pursuant to clause (i) of
this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii), (iii) or (iv) of
this paragraph shall become effective immediately after the effective date of
such subdivision or combination or reclassification.


 


(b)                                 Pro Rata Distributions. 
If the Company, at any time while this Warrant is outstanding,
distributes to all holders of Common Stock for no consideration (i) evidences
of its indebtedness, (ii) any security (other than a distribution of
Common Stock covered by the preceding paragraph) or (iii) rights, options
or warrants to subscribe for or purchase any security,  or (iv) any other asset (including cash or
cash dividends) (in each case, “Distributed  Property”),
then, upon any exercise of this Warrant that occurs after the record date fixed
for determination of stockholders entitled to receive such distribution, the
Holder shall be entitled to receive, in


 

















 


addition to the Warrant Shares otherwise
issuable upon such exercise (if applicable), the Distributed Property that such
Holder would have been entitled to receive in respect of such number of Warrant
Shares had the Holder been the record holder of such Warrant Shares immediately
prior to such record date without regard to any limitation on exercise
contained therein.


 


(c)                                  Fundamental
Transactions.  If, at any
time while this Warrant is outstanding  (i) the
Company effects any merger or consolidation of the Company with or into another
Person, in which the Company is not the survivor or the stockholders of the
Company immediately prior to such merger or consolidation do not own, directly
or indirectly, at least 50.1% of the voting securities of the surviving entity,
(ii) the Company effects any sale, lease, assignment, transfer, conveyance
or other distribution of all or substantially all of its assets is acquired by
a third party, in each case,  in one or a
series of related transactions, (iii) any direct or indirect purchase
offer, tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which at least a majority of the holders of
Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, (iv) the Company, directly or indirectly, in
one or more related transactions, effects any reorganization, recapitalization
or reclassification of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged
for other securities, cash or property (other than as a result of a subdivision
or combination of shares of Common Stock covered by Section 9(a) above),
or (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another person whereby such other
person acquires more than 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the other person or other persons
making or party to, or associated or affiliated with the other persons making or
party to, such stock or share purchase agreement or other business combination)
(in any such case, a “Fundamental
Transaction”), then the Holder shall have the right thereafter
to receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant without regard to any
limitations on exercise contained herein (the “Alternate Consideration”).  The Company shall not effect any such
Fundamental Transaction unless prior to or simultaneously with the consummation
thereof, any successor to the Company, surviving entity or the corporation
purchasing or otherwise acquiring such assets or other appropriate corporation
or Person shall assume the obligation to deliver to the Holder, such Alternate
Consideration as, in accordance with the foregoing provisions, the Holder may
be entitled to receive, and the other obligations under this Warrant.  The provisions of this paragraph (c) shall
similarly apply to subsequent transactions analogous of a Fundamental
Transaction type.  Notwithstanding the
foregoing, in the event of a Change of Control other than one in which a
successor entity that is a publicly traded corporation whose stock is quoted or
listed for trading on an Eligible Market assumes this Warrant such that the
Warrant shall be exercisable for the publicly traded common stock of such
successor entity, at the option of the Holder exercisable at any time
concurrently with or within 90 days after such Change of Control, the Company
(or the successor entity) shall purchase this Warrant from the Holder by paying
to the Holder, within five Trading Days after such request (or, if later, on
the effective date of the Change of Control), cash in an amount equal to the
Black Scholes Value of the remaining unexercised portion of this Warrant on the
date of the consummation of such Change of Control.The Company shall cause any
successor entity in a Fundamental Transaction in which the Company is not the
survivor (the “Successor Entity”) to assume
in writing all of the obligations of the Company under this Warrant and the
other Transaction Documents in accordance with the


 

















 


provisions
of this Section 9(c) pursuant to written agreements prior to such
Fundamental Transaction and shall, at the option of the holder of this Warrant,
deliver to the Holder in exchange for this Warrant a security of the Successor
Entity evidenced by a written instrument substantially similar in form and
substance to this Warrant which is exercisable for a corresponding number of
shares of capital stock of such Successor Entity (or its parent entity)
equivalent to the shares of Common Stock acquirable and receivable upon
exercise of this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and with an exercise price
which applies the exercise price hereunder to such shares of capital stock (but
taking into account the relative value of the shares of Common Stock pursuant
to such Fundamental Transaction and the value of such shares of capital stock,
such number of shares of capital stock and such exercise price being for the
purpose of protecting the economic value of this Warrant immediately prior to
the consummation of such Fundamental Transaction).  Upon the occurrence of any such Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental Transaction, the provisions of
this Warrant referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Warrant with the same effect
as if such Successor Entity had been named as the Company herein.


 


For
the benefit of both the Company and the Holder, attached as Exhibit A
to this Warrant is an example of the Black Scholes Value calculation using
assumed numbers.


 


As
used herein, the following capitalized terms shall have the meanings set forth
below:


 


“Black Scholes Value” means the value
of this Warrant based on the Black and Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Change of Control
for pricing purposes and reflecting:  (i) a
risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the time between the date of the public announcement of the applicable
Change of Control and the Expiration Date, (ii) an expected volatility
equal to one hundred percent (100%), (iii) the underlying price per share
used in such calculation shall be the sum of the price per share to be received
in cash, if any, plus the value of any non-cash consideration to be received,
if any, by the holders of Common Stock upon the consummation of the applicable
Change of Control, and (iv) a remaining option time equal to the time
between the date of the public announcement of the applicable Change of Control
and the Expiration Date.


 


“Change of Control” means any
Fundamental Transaction other than (i) any reorganization, recapitalization
or reclassification of the Common Stock in which holders of the Company’s
voting power immediately prior to such reorganization, recapitalization or
reclassification continue after such reorganization, recapitalization or
reclassification to hold the investment power (which includes the direct
ownership of and power to dispose of such securities) and voting power with
respect to publicly traded securities and, directly have the voting power of
the surviving entity or entities necessary to elect a majority of the members
of the board of directors (or their equivalent if other than a corporation) of
such entity or entities, or (ii) pursuant to a migratory merger effected
solely for the purpose of changing the jurisdiction of incorporation of the
Company.


 


“Eligible Market” means the New York
Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the
NASDAQ Capital Market, or the NYSE Amex.


 

















 


(d)                                 Number of Warrant Shares. 
Simultaneously with any adjustment to the Exercise Price pursuant to
paragraph (a) of this Section 9, the number of Warrant Shares that
may be purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the increased or decreased number of Warrant Shares shall
be the same as the aggregate Exercise Price in effect immediately prior to such
adjustment.


 


(e)                                  Subsequent Equity Sales.


 


(i)                                     If the Company
shall at any time issue shares of Common Stock or Common Stock Equivalents
entitling any Person to acquire shares of Common Stock, at an effective
consideration per share less than the Exercise Price in effect immediately
prior to the time of such issuance (if the holder of the Common Stock or Common
Stock Equivalent so issued shall at any time, whether by operation of purchase
price adjustments, reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights issued in connection
with such issuance, be entitled to receive shares of Common Stock at a price
less than the Exercise Price, such issuance shall be deemed to have occurred
for less than the Exercise Price), then, the Exercise Price shall be reduced to
equal such lower price, but the number of Warrant Shares which the Holder may
acquire under this Warrant will not be affected thereby. Such adjustment shall
be made whenever such Common Stock or Common Stock Equivalents are issued.  The Company shall notify the Holder in
writing, no later than the Trading Day following the issuance of any Common
Stock or Common Stock Equivalent subject to this Section, indicating therein
the applicable issuance price, or the applicable reset price, exchange price,
conversion price and other pricing terms.


 


As used in this Warrant, the term “Common Stock Equivalents”
means any securities of the Company or any Subsidiary which would entitle the
holder thereof to acquire at any time Common Stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common
Stock.


 


(ii)                                  For purposes of this paragraph (e), the
following paragraphs (e)(ii)(l) to (e)(ii)(7) shall also be
applicable:


 


(1)                                  Issuance of Rights or Options. 
In case at any time the Company shall in any manner grant (directly and
not by assumption in a merger or otherwise) any warrants or other rights to
subscribe for or to purchase, or any options for the purchase of, Common Stock
or any stock or security convertible into or exchangeable for Common Stock
(such warrants, rights or options being called “Options” and such convertible or exchangeable
stock or securities being called “Convertible
Securities”), whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
the exercise of such Options or upon the conversion or exchange of such
Convertible Securities (determined by dividing (i) the sum (which sum
shall constitute the applicable consideration) of (x) the total amount, if
any, received or receivable by the Company as consideration for the granting of
such Options, plus (y) the aggregate amount of additional consideration
payable to the Company upon the exercise of all such Options, plus (z), in the
case of such Options that relate to Convertible Securities, the aggregate
amount of additional consideration, if any, payable upon the issue or sale of
such Convertible Securities and upon the conversion or exchange thereof, by (ii) the
total maximum number of shares of Common Stock issuable upon the exercise of
such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options) shall be less than the
Exercise


 

















 


Price in effect immediately prior to the
time of the granting of such Options, then the total number of shares of Common
Stock issuable upon the exercise of such Options or upon conversion or exchange
of the total amount of such Convertible Securities issuable upon the exercise
of such Options shall be deemed to have been issued for such price per share as
of the date of granting of such Options or the issuance of such Convertible
Securities and thereafter shall be deemed to be outstanding for purposes of
adjusting the Exercise Price. Except as otherwise provided in paragraph (e)(ii)(3),
no adjustment of the Exercise Price shall be made upon the actual issue of such
Common Stock or of such Convertible Securities upon exercise of such Options or
upon the actual issue of such Common Stock upon conversion or exchange of such
Convertible Securities.


 


(2)                                  Issuance of Convertible Securities. 
In case the Company shall in any manner issue (directly and not by
assumption in a merger or otherwise) or sell any Convertible Securities,
whether or not the rights to exchange or convert any such Convertible
Securities are immediately exercisable, and the price per share for which
Common Stock is issuable upon such conversion or exchange (determined by
dividing (i) the sum (which sum shall constitute the applicable
consideration) of (x) the total amount received or receivable by the
Company as consideration for the issue or sale of such Convertible Securities,
plus (y) the aggregate amount of additional consideration, if any, payable
to the Company upon the conversion or exchange thereof, by (ii) the total
number of shares of Common Stock issuable upon the conversion or exchange of
all such Convertible Securities) shall be less than the Exercise Price in
effect immediately prior to the time of such issue or sale, then the total
maximum number of shares of Common Stock issuable upon conversion or exchange
of all such Convertible Securities shall be deemed to have been issued for such
price per share as of the date of the issue or sale of such Convertible
Securities and thereafter shall be deemed to be outstanding for purposes of
adjusting the Exercise Price, provided that (a) except as otherwise
provided in paragraph (e)(ii)(3), no adjustment of the Exercise Price shall be
made upon the actual issuance of such Common Stock upon conversion or exchange
of such Convertible Securities and (b) no further adjustment of the
Exercise Price shall be made by reason of the issue or sale of Convertible
Securities upon exercise of any Options to purchase any such Convertible
Securities for which adjustments of the Exercise Price have been made pursuant
to the other provisions of paragraph (e). No
adjustment pursuant to this Section 9 shall be made if such adjustment
would result in an increase of the Exercise Price then in effect.


 


(3)                                  Change in Option Price or Conversion Rate. 
Upon the happening of any of the following events, namely, if the
purchase price provided for in any Option referred to in paragraph (e)(ii)(l) of
this Section 9, the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in paragraphs
(e)(ii)(l) or (e)(ii)(2), or the rate at which Convertible Securities
referred to in paragraphs (e)(ii)(l) or (e)(ii)(2) are convertible
into or exchangeable for Common Stock shall change at any time (including, but
not limited to, changes under or by reason of provisions designed to protect
against dilution), the Exercise Price in effect at the time of such event shall
forthwith be reduced to the Exercise Price that would have been in effect at
such time had such Options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or conversion rate,
as the case may be, at the time initially granted, issued or sold.


 


(4)                                  Stock Dividends.  Subject to the provisions of this paragraph
(e), in case the Company shall declare a dividend or make any other
distribution upon any stock of the Company (other than the Common Stock)
payable in Common Stock, Options or Convertible Securities, then any Common
Stock, Options or Convertible Securities, as the case may be, issuable in
payment of such dividend or distribution shall be deemed to have been issued or
sold without consideration.


 

















 


(5)                                  Consideration for Stock. 
In case any shares of Common Stock, Options or Convertible Securities
shall be issued or sold for cash, the consideration received therefor shall be
deemed to be the gross amount received by the Company therefor.  In case any shares of Common Stock, Options
or Convertible Securities shall be issued or sold for a consideration other
than cash, the amount of the consideration other than cash received by the
Company shall be deemed to be the fair value of such consideration as
determined in good faith by the Board of Directors of the Company.  In case any Options or Convertible Securities
(the “Additional Rights”) are
issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) such Options or
Convertible Securities will be deemed to have been issued for the Black Scholes
Value (the “Option Value”) and (y) the
other securities issued or sold in such integrated transaction shall be deemed
to have been issued for the difference of (I) the aggregate consideration
received by the Company, less (II) the Option Value.  The Board of Directors of the Company shall
respond promptly, in writing, to an inquiry by the Holder as to the fair market
value of the Additional Rights.  In the
event that the Board of Directors of the Company and the Holder are unable to
agree upon the fair market value of the Additional Rights, the Company and the
Holder shall jointly select an appraiser who is experienced in such
matters.  The decision of such appraiser
shall be final and conclusive, and the cost of such appraiser shall be borne
evenly by the Company and the Holder.


 


(6)                                  Record Date.  In case the Company shall take a record of
the holders of its Common Stock for the purpose of entitling them (i) to
receive a dividend or other distribution payable in Common Stock, Options or
Convertible Securities, or (ii) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record date shall be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or
purchase, as the case may be.


 


(7)                                  Treasury Shares.  The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company or any of its wholly-owned subsidiaries, and the
disposition of any such shares (other than the cancellation or retirement
thereof) shall be considered an issue or sale of Common Stock for the purpose
of this paragraph (e).


 


(iii)                               Notwithstanding
the foregoing, no adjustment will be made under this paragraph (e) in
respect of:  (i) the issuance of
securities upon the exercise or conversion of any Common Stock or Common Stock
Equivalents issued by the Company prior to the date hereof provided that the
terms of such Common Stock or Common Stock Equivalents are not amended,
modified or changed on or after the date hereof, (ii) the grant of
options, warrants, Common Stock or other Common Stock Equivalents (but not
including any amendments to such instruments) under any duly authorized Company
stock option, restricted stock plan or stock purchase plan whether now existing
or hereafter approved by the Company and its stockholders in the future, and
the issuance of Common Stock in respect thereof, (iii) the issuance of
securities in connection with a Strategic Transaction, or (iv) the
issuance of securities in a transaction described in Section 9(a) or
9(b) (collectively, “Excluded
Issuances”).  For purposes
of this paragraph, a “Strategic
Transaction” means a transaction or relationship in which (1) the
Company issues shares of Common Stock to a Person that the Board of Directors
of the Company determined in good faith is, itself or through its Subsidiaries,
an operating company in a business synergistic with the business of the Company
(or a shareholder thereof) and (2) the Company expects to receive benefits
in addition to the investment of funds, but shall not include (x) a
transaction in which the Company is issuing securities primarily for the
purpose of raising capital or to a Person whose primary business is investing
in securities or (y) issuances to lenders.


 

















 


(iv)                              Nasdaq Limitation. 
Notwithstanding any other provisions in this Section 9 to the
contrary, if a reduction in the Exercise Price pursuant to Section 9(e)(i) would
require the Company to obtain stockholder approval of the transactions
contemplated by the Underwriting Agreement pursuant to Nasdaq Marketplace Rule 5635(d) and
such stockholder approval has not been obtained, (i) the Exercise Price
shall be reduced to the maximum extent that would not require stockholder
approval under such Rule, and (ii) the Company shall use its reasonable
best efforts to obtain such stockholder approval (including causing the Board
of Directors of the Company to recommend to the stockholders that they grant
such approval) as soon as reasonably practicable, including by calling a
special meeting of stockholders to vote on such Exercise Price adjustment.  If, despite the Company’s reasonable best
efforts, stockholder approval is not obtained at such special meeting, the
Company shall cause an additional special meeting to be held each calendar
quarter thereafter until such stockholder approval is obtained.


 


(f)                                    Calculations. 
All calculations under this Section 9 shall be rounded to the
nearest cent or up to the next share, as applicable.


 


(g)                                 Notice of Adjustments. 
Upon the occurrence of each adjustment pursuant to this Section 9,
the Company at its expense will promptly notify the Holders of the applicable
adjustment, compute such adjustment, in good faith, in accordance with the
terms of this Warrant and prepare a certificate setting forth such adjustment,
including a statement of the adjusted Exercise Price and adjusted number or
type of Warrant Shares or other securities issuable upon exercise of this
Warrant (as applicable), describing the transactions giving rise to such
adjustments and showing in detail the facts upon which such adjustment is
based.  Upon written request, the Company
will promptly deliver a copy of each such certificate to the Holder and to the
Company’s transfer agent.


 


(h)                                 Notice of Corporate Events. 
If, while this Warrant is outstanding, the Company (i) declares a
dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including, without limitation, any granting of
rights or warrants to subscribe for or purchase any capital stock of the
Company or any subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating or solicits stockholder approval for any Fundamental
Transaction or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then, except if such notice and the
contents thereof shall be deemed to constitute material non-public information,
the Company shall deliver to the Holder a notice of such transaction at least
ten (10) business days prior to the applicable record or effective date on
which a Person would need to hold Common Stock in order to participate in or
vote with respect to such transaction and the Company will take all reasonable
steps to give Holder the practical opportunity to exercise this Warrant prior
to such time; provided, however,
that the failure to deliver such notice or any defect therein shall not affect
the validity of the corporate action required to be described in such
notice.  To the
extent that any notice provided hereunder constitutes, or contains, material,
non-public information regarding the Company or any of its  subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K.


 
















 


10.                                 Payment of Exercise Price. The Holder shall pay the Exercise Price
in immediately available funds; provided,
however, that in the case of a Restrictive Legend Event (as defined
below), the Holder may notify the Company in an Exercise Notice of its election
to utilize a “cashless exercise,” in which event the Company shall issue to the
Holder the number of Warrant Shares determined as follows:


 


X
= Y [(A-B)/A]


 


where:


 


X
= the number of Warrant Shares to be issued to the Holder.


 


Y
= the total number of Warrant Shares with respect to which this Warrant is
being exercised.


 


A = the average of the Closing Sale Prices of
the shares of Common Stock (as reported by Bloomberg Financial Markets) for the
five (5) consecutive Trading Days ending on the date immediately preceding
the Exercise Date (the “Average Price”).


 


B
= the Exercise Price then in effect for the applicable Warrant Shares at the
time of such exercise.


 


For
purposes of this Warrant, “Closing Sale Price”
means, for any security as of any date, the last trade price for such security
on the principal securities exchange or trading market for such security, as
reported by Bloomberg Financial Markets, or, if such exchange or trading market
begins to operate on an extended hours basis and does not designate the last
trade price, then the last trade price of such security prior to 4:00 P.M.,
New York City time, as reported by Bloomberg Financial Markets, or if the
foregoing do not apply, the last trade price of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg Financial Markets, or, if no last trade price is reported
for such security by Bloomberg Financial Markets, the average of the bid
prices, or the ask prices, respectively, of any market makers for such security
as reported in the “pink sheets” by Pink Sheets LLC.  If the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Closing Sale Price of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder.  If the Company and the Holder are unable to
agree upon the fair market value of such security, then the Board of Directors
of the Company shall use its good faith judgment to determine the fair market
value.  The Board of Directors’
determination shall be binding upon all parties absent demonstrable error.  All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination
or other similar transaction during the applicable calculation period.


 


The
Company shall provide to the Holder prompt written notice of any time that the
Company is unable to issue the Warrant Shares via DTC transfer (or otherwise
without restrictive legend), because (A) the Commission  has issued a stop order with respect to the Registration
Statement, (B) the Commission otherwise has suspended or withdrawn the
effectiveness of the Registration Statement, either temporarily or permanently,
(C) the Company has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, or (D) the
Registration Statement is otherwise not then effective (each a “Restrictive Legend  Event”).  To the extent that a Restrictive Legend Event
occurs after the Holder has exercised this Warrant in accordance with Section 4(b) but
prior to the delivery of the Warrant Shares, the Company shall 


 

















 


(i) if
the Average Price of the Warrant Shares is greater than the Exercise Price,
provide written notice to the Holder that the Company will deliver that number
of Warrant Shares to the Holder as should be delivered in a Cashless Exercise
in accordance with this Section 10, and return to the Holder all
consideration paid to the Company in connection with the Holder’s attempted
exercise of this Warrant pursuant to Section 4(b) (a “Company-Elected Conversion”),
or (ii) at the election of the Holder to be given within five (5) days
of receipt of notice of a Company-Elected Conversion, the Holder shall be
entitled to rescind the previously submitted Notice of Exercise and the Company
shall return all consideration paid by Holder for such shares upon such
rescission.  The Company shall provide to
the Holder prompt written notice of the termination of the Restrictive Legend
Event.  If a Restricted Legend Event is
occurring as of the Expiration Date, the term of this Warrant shall be extended
until the fifth (5th) business day
after the termination of such Restricted Legend Event.


 


Notwithstanding
anything herein to the contrary, on the Expiration Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section 10.


 


11.                                 Limitations on Exercise.


 


(a)                                  Notwithstanding anything to the contrary
contained herein, the number of Warrant Shares that may be acquired by the
Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall
be limited to the extent necessary to ensure that, following such exercise (or
other issuance), the total number of shares of Common Stock then beneficially
owned by the Holder and its affiliates and any other persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act, does not exceed 4.99% of the total
number of issued and outstanding shares of Common Stock (including for such
purpose the shares of Common Stock issuable upon such exercise). For such
purposes, beneficial ownership shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated
thereunder.  For purposes of this Section 11(a),
in determining the number of outstanding shares of Common Stock, a Holder may
rely on the number of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with the Commission, as
the case may be, (B) a more recent public announcement by the Company or (C) a
more recent written notice by the Company or its transfer agent setting forth
the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder,
the Company shall within two trading days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by the Holder or
its affiliates since the date as of which such number of outstanding shares of
Common Stock was reported.  The Company’s
obligation to issue shares of Common Stock in excess of the limitation referred
to in this Section shall be suspended (and, except as provided below,
shall not terminate or expire notwithstanding any contrary provisions hereof)
until such time, if any, as such shares of Common Stock may be issued in
compliance with such limitation; provided that
if, as of 5:30 P.M., New York City time, on the Expiration Date, the
Company has not received written notice that the shares of Common Stock may be
issued in compliance with such limitation, the Company’s obligation to issue
such shares shall terminate.  This
provision shall not restrict the number of shares of Common Stock which a
Holder may receive or beneficially own in order to determine the amount of
securities or other consideration that such Holder may receive in the event of
a Fundamental Transaction as contemplated in Section 9 of this
Warrant.  By written notice to the
Company, the Holder may waive the provisions of this Section but any such
waiver will not be effective until the 61st day after such notice is delivered
to the Company, nor will any such waiver affect any other Holder.


 

















 


(b)                                 Notwithstanding anything to the contrary
contained herein, the number of Warrant Shares that may be acquired by the
Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall
be limited to the extent necessary to ensure that, following such exercise (or
other issuance), the total number of shares of Common Stock then beneficially
owned by such Holder and its affiliates and any other persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act, does not exceed 9.99% of the total
number of issued and outstanding shares of Common Stock (including for such
purpose the shares of Common Stock issuable upon such exercise).  For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder.  The Company’s obligation to issue shares of
Common Stock in excess of the limitation referred to in this Section shall
be suspended (and, except as provided below, shall not terminate or expire
notwithstanding any contrary provisions hereof) until such time, if any, as
such shares of Common Stock may be issued in compliance with such limitation; provided that if, as of 5:30 P.M., New York City time,
on the Expiration Date, the Company has not received written notice that the
shares of Common Stock may be issued in compliance with such limitation, the
Company’s obligation to issue such shares shall terminate.  This provision shall not restrict the number
of shares of Common Stock which a Holder may receive or beneficially own in
order to determine the amount of securities or other consideration that such
Holder may receive in the event of a Fundamental Transaction as contemplated in
Section 9 of this Warrant.  This
restriction may not be waived.


 


12.                                 No Fractional Shares. 
No fractional Warrant Shares will be issued in connection with any
exercise of this Warrant.  In lieu of any
fractional shares that would, otherwise be issuable, the number of Warrant
Shares to be issued shall be rounded down to the next whole number and the
Company shall pay the Holder in cash the fair market value (based on the
Closing Sale Price) for any such fractional shares.


 


13.                                 Notices.  Any and
all notices or other communications or deliveries hereunder (including, without
limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in the Underwriting Agreement prior to 5:30 P.M., New York City
time, on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in the Underwriting Agreement on a day that is not a
Trading Day or later than 5:30 P.M., New York City time, on any Trading
Day, (iii) the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service specifying next business day
delivery, or (iv) upon actual receipt by the party to whom such notice is
required to be given, if by hand delivery. 
The address and facsimile number of a party for such notices or
communications shall be as set forth in the Underwriting Agreement unless
changed by such party by two (2) Trading Days’ prior notice to the other
party in accordance with this Section 13.


 


14.                                 Warrant Agent. 
The Company shall serve as warrant agent under this Warrant.  Upon thirty (30) days’ notice to the Holder,
the Company may appoint a new warrant agent. 
Any corporation into which the Company or any new warrant agent may be
merged or any corporation resulting from any consolidation to which the Company
or any new warrant agent shall be a party or any corporation to which the
Company or any new warrant agent transfers substantially all of its corporate
trust or shareholders services business shall be a successor warrant agent
under this Warrant without any further act. 
Any such successor warrant agent shall promptly cause notice of its
succession as warrant agent to be mailed (by first class mail, postage prepaid)
to the Holder at the Holder’s last address as shown on the Warrant Register.


 

















 


15.                                 Miscellaneous.


 


(a)                                  No Rights as a Stockholder.  Unless otherwise permitted in this Warrant,
the Holder, solely in such Person’s capacity as a holder of this Warrant, shall
not be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Holder, solely in such Person’s
capacity as the Holder of this Warrant, any of the rights of a stockholder of
the Company or any right to vote, give or withhold consent to any corporate
action (whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, amalgamation, conveyance or otherwise), receive notice
of meetings, receive dividends or subscription rights, or otherwise, prior to
the issuance to the Holder of the Warrant Shares which such Person is then
entitled to receive upon the due exercise of this Warrant.  In addition, nothing contained in this Warrant
shall be construed as imposing any liabilities on the Holder to purchase any
securities (upon exercise of this Warrant or otherwise) or as a stockholder of
the Company, whether such liabilities are asserted by the Company or by
creditors of the Company.


 


(b)                                 Authorized Shares.  (i) The Company covenants that during
the period the Warrant is outstanding, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of the Warrant Shares upon the exercise of any purchase rights under this
Warrant.  The Company further covenants
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant.  The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or regulation, or of
any requirements of the Trading Market upon which the Common Stock may be
listed.  The Company covenants that all
Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges created by the Company
in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).


 


(ii)                                  Except and to
the extent as waived or consented to by the Holder, the Company shall not by
any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant
against impairment.  Without limiting the
generality of the foregoing, the Company will (a) not increase the par
value of any Warrant Shares above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (b) take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant, and (c) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant.


 


(iii)                               Before taking
any action which would result in an adjustment in the number of Warrant Shares
for which this Warrant is exercisable or in the Exercise Price, the Company
shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.


 

















 


(c)                                  Successors and Assigns.  Subject to compliance with applicable
securities laws, this Warrant may be assigned by the Holder. This Warrant may
not be assigned by the Company without the written consent of the Holder except
to a successor in the event of a Fundamental Transaction.  This Warrant shall be binding on and inure to
the benefit of the parties hereto and their respective successors and
assigns.  Subject to the preceding
sentence, nothing in this Warrant shall be construed to give to any Person
other than the Company and the Holder any legal or equitable right, remedy or
cause of action under this Warrant.  This
Warrant may be amended only in writing signed by the Company and the Holder, or
their successors and assigns.


 


(d)                                 Amendment and Waiver.  Except as otherwise provided herein, the
provisions of the Warrant may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed
by it, only if the Company has obtained the written consent of the Holder.


 


(e)                                  Acceptance.  Receipt of this Warrant by the Holder shall
constitute acceptance of and agreement to all of the terms and conditions
contained herein.


 


(f)                                    Governing Law; Jurisdiction.  ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF
NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT
IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT. 
EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY
(WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES
TO IT UNDER THE UNDERWRITING AGREEMENT AND AGREES THAT SUCH SERVICE SHALL
CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED TO
LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY
LAW.  EACH PARTY HEREBY WAIVES ALL RIGHTS
TO A TRIAL BY JURY.


 


(g)                                 Headings.  The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.


 


(h)                                 Severability.  In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby, and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.


 

















 


(i)                                     Remedies.  The
Company stipulates that the remedies at law of the Holder of this Warrant in
the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.


 


[Signature
Page Follows]


 

















 


IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed by its authorized officer as of the date first
indicated above.


 


 


	
   

  	
  HELICOS BIOSCIENCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 

















 


EXHIBIT
A


 


DETERMINATION OF ALTERNATE CONSIDERATION

IN CONNECTION WITH A FUNDAMENTAL TRANSACTION


 


In
the event that the Black Scholes Value form of Alternate Consideration is
triggered pursuant to Section 9 of the Warrant, the following schedule
will be referenced for purposes of determining the amount of cash consideration
due the holder:


 


X
= Remaining Number of Shares subject to unexercised portion of the Warrant on
the date of consummation of the triggering Change of Control transaction


 


Y
= Black Scholes Value (per share) — based on the Black and Scholes Option
Pricing Model obtained from the “OV” function on Bloomberg L.P. (“Bloomberg”)
using the following parameters:


 


·                  Risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the time between the date of the
public announcement of the applicable Change of Control and the Expiration
Date,


·                  Expected volatility equal to one hundred
percent (100%),


·                  Underlying price per share used in such
calculation shall be the sum of the price per share to be received in cash, if
any, plus the value of any non-cash consideration to be received, if any, by
the holders of Common Stock upon the consummation of the applicable Change of
Control, and


·                  Remaining option time equal to the time between
the date of the public announcement of the applicable Change of Control and the
Expiration Date.


 


Cash
Consideration due Warrant Holder = X multiplied by Y


 

















 


SCHEDULE
1


 


FORM OF
EXERCISE NOTICE


 


[To be executed
by the Holder to purchase shares of Common Stock under the foregoing Warrant]


 


Ladies and Gentlemen:


 


(1)                                  The undersigned is the Holder of Warrant No.                     
(the “Warrant”) issued by Helicos
BioSciences Corporation, a Delaware corporation (the “Company”).  Capitalized terms used herein and not
otherwise defined herein have the respective meanings set forth in the Warrant.


 


(2)                                  The undersigned hereby exercises its
right to purchase
                    
Warrant Shares pursuant to the Warrant.


 


(3)                                  The Holder intends that payment of the
Exercise Price shall be made as (check one):


 


o                                    Cash Exercise


 


o                                    “Cashless Exercise” under Section 10


 


(4)                                  If the Holder has elected a Cash
Exercise, the Holder shall pay the sum of
$              
in immediately available funds to the Company in accordance with the terms of
the Warrant.


 


(5)                                  Pursuant to this Exercise Notice, the
Company shall deliver to the Holder Warrant Shares determined in accordance
with the terms of the Warrant.


 


 


	
  Dated:                                ,         

  	
   

  
	
   

  	
   

  
	
  Name
  of Holder:

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				



 

















 


SCHEDULE
2


 


FORM OF
ASSIGNMENT


 


[To be
completed and signed only upon transfer of Warrant]


 


FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
                            
(the “Transferee”) the right
represented by the within Warrant to purchase
                
shares of Common Stock of
                          
(the “Company”) to which the within
Warrant relates and appoints
                            
attorney to transfer said right on the books of the Company with full power of
substitution in the premises.


 


	
  Dated:                ,     

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature
  must conform in all respects to name of holder as specified on the face of
  the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  of Transferee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  In
  the presence of: